Lessons Apple Can Learn From A Small Businessman

One of the things that always amazes me is how big businesses lose sight of what makes a business successful in the first place. Granted, market environments change, but basic business concepts and formulas stay the same. Apple is no different. Education used to be the cornerstone of its business, now it is no more than an afterthought, receiving only lip service rather than focus. Steve Jobs and company need to take a serious step back and look at what has happened to Apple’s education strategies in the past five years.

In mid November I lost my father, he was a pharmacist who ran his own business for nearly 40 years before retiring at 73. Like most retail establishments his retail landscape went through massive upheaval and changes beginning in the late 70’s. Due to a combination of the then new concept of insurance co-pays and grocery chain pharmacies my father foresaw that his comfortable 30% profit margins would quickly disappear. To not only protect, but also increase market share he recognized that key to surviving this new assault was to stay close to the physicians (especially family practitioners) who provided the potential customers.

Translation to Apple:
Apple used to recognize the importance of dominating the education market. By staying in a close relationship to the schools Apple created an inside advantage. I can remember selling computers for a big-box retailer several years ago. Ninety-plus percent of the time when a family came in shopping for a computer the kids gravitated immediately to the Macs. Why, because that rainbow-colored piece of silicon fruit was what they got to work on at school. An overwhelming majority of my Mac sales came about in that fashion.

As Apple’s education division continues to flounder Dell taking a page from Apple’s original playbook, has pounded on the doors of education. Now, when a family looks to buy a new computer guess who the kids gravitate towards? The Dell dufus!

The second thing my father recognized was that he could never compete across the board on price. So, in order to stay open he make sure out hustle the chain stores. Walk in customers never waited for more than three minutes from the time they handed over the prescription under regular customer traffic. Even during worst Monday “rush” times when the store was full customers never experienced more than a ten minute wait. He made himself instantly available for questions. Customers who came back to him after trying the chains always mentioned speed.

Translation to Apple:
True customer service involves accessibility. Apple education as I have pounded on many times is all but invisible. Faxes are not customer friendly. Face to face contact is the only way to sway customers in the face of lower price competition. Apple must get back to an onsite sales staff that visits not only administrators but the IT gurus as well. For example, three agents could cover the state of Oregon, visiting each school 3 times a year. Granted, the cost for all fifty states may amount to $20 million a year, but with four-plus billion in the bank it would be pocket change.

The third thing my father understood was that follow up service; honest caring and occasional freebies went a long way to keeping customers loyal. He made it a point to always ask something personal to all his regular customers. This old fashioned approach seems silly and out-dated today, but it still works.

Translation to Apple
The sale isn’t over once the customer has received the product, it is only the beginning. In this day and age of technological complexity post sale service is paramount. This is especially true for schools, which have had to endure countless cost-cutting measures in order to support the ever-increasing, yet unfunded government mandates. Apple must provide free of charge technical support for six months in the area of network integration. I know from first hand experience the fist pounding and head banging that goes on when trying integrate new computers into a network. No matter how straightforward it seems glitches can, and will happen. Having free tech support onsite helps to prove to IT guys that the problem is not “having Macs in the system”. I know that if my old school would have had free onsite tech support it would still be a Mac school rather than Dell.

Finally, my father recognized how important even a small sale, especially impulse items were to the bottom line. In order to make up for his thinning profit margins he began selling pop, juice, water, cinnamon rolls, and chips for fifty cents. The various office personnel became regular visitors, and in return recommended the pharmacy to patients.

Translation to Apple
The many people that I have chatted with regarding their opinion of the Apple Stores all come back with the same opinion, “I wish they sold key chains, coffee mugs, t-shirts, etc.”. Remember, us Mac owners are downright religious in our support, so it would be wonderful to show our support beyond the sticker in the car window. The Intel parents at my school regularly deluge me with all sorts of Pentium III and IV trinkets. All I have to show them in return is a worn out “Power To Go” coffee mug from 1996. The sale of these advertisers alone would add 5 percent to store sales, nothing to sneeze about in today’s economy.

Apple’s Education division needs to get back to the basics of customer service if it expects to be more than just the video editing computer in the lab. By going back to its roots as well as creating a true customer service model it stands a chance otherwise schools might as well start calling the computer room the Dell lab.

Macworld Keynote Footnote:
Was I the only one to notice that education market was not included in Steve Jobs keynote address with the exception of the extended giveaway of free copies of Jaguar OS that teachers could sign up to receive. I consider this to be a sad precedent of things to come, as few education apps can be found written for OSX. I call on Apple once again to create a University of X to assist in the development/carbonizing of educational programs otherwise the distribution of Jaguar to teachers is nothing more than a fools paradise.

Mark Marcantonio

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